Quantcast
Environmental News for a Healthier Planet and Life

Bankrupt Fracking Companies Are Harming the Climate and Taxpayers

Energy
Bankrupt Fracking Companies Are Harming the Climate and Taxpayers
Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year. Joshua Doubek / Wikimedia Commons / CC by 3.0

Fracking companies are going bankrupt at a rapid pace, often with taxpayer-funded bonuses for executives, leaving harm for communities, taxpayers, and workers, the New York Time reports.


Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year — more than went under in the last five years combined — as demand craters due to the pandemic, a global price war, and falling renewable energy prices. These failing companies often neglect well maintenance and plugged well repairs to save money, causing tons of ultra-heat-trapping methane to continue gushing into the atmosphere.

Shale wells typically cost $300,000 to close — far more than the estimates used by companies, regulators and financial analysts — and an analysis prepared for the Times found companies have failed to reserve sufficient funds, as required by law, to remediate their well sites, leaving taxpayers to foot the cleanup bill.

As a result, early estimates show substantial increases in methane concentrations over Texas and New Mexico oil fields in March and April 2020 compared to the previous year. The Trump administration is seeking to effectively eliminate methane leak detection and repair requirements.

One drilling site, abandoned by Extraction Oil & Gas in Greeley, Colorado, is situated just 700 feet from an elementary school serving the community's fast-growing immigrant population where air pollution monitors recorded 100 periods of elevated levels of toxic benzene over the course of seven months last year.

Those wells were originally planned to lie closer to a more affluent, majority white charter school, but were moved after an outcry from that school's parents. Extraction Oil & Gas paid 18 of its officers and key employees a combined $6.7 million in "retention agreements" last month, three days before it filed for bankruptcy protection.

Extraction is hardly alone, Chesapeake Energy declared bankruptcy in May after paying $25 million in executive bonuses just weeks before. Diamond Offshore Drilling got a $9.7 million COVID-stimulus tax refund in March and then paid its executives the same amount as cash incentives to remain with the company as it undergoes bankruptcy proceedings.

"It seems outrageous that these executives pay themselves before filing for bankruptcy," Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis and a finance professor at Bard College told the Times. "These are the same managers who ran these companies into bankruptcy to begin with."

The recent spate of oil & gas bankruptcies hurts the firms' workers as well, with lawsuits against the companies arising from workers injured and killed on the job put on hold.

For a deeper dive:

New York Times

For more climate change and clean energy news, you can follow Climate Nexus on Twitter and Facebook, and sign up for daily Hot News.

Plastic bails, left, and aluminum bails, right, are photographed at the Green Waste material recovery facility on Thursday, March 28, 2019, in San Jose, California. Aric Crabb / Digital First Media / Bay Area News via Getty Images

By Courtney Lindwall

Coined in the 1970s, the classic Earth Day mantra "Reduce, Reuse, Recycle" has encouraged consumers to take stock of the materials they buy, use, and often quickly pitch — all in the name of curbing pollution and saving the earth's resources. Most of us listened, or lord knows we tried. We've carried totes and refused straws and dutifully rinsed yogurt cartons before placing them in the appropriately marked bins. And yet, nearly half a century later, the United States still produces more than 35 million tons of plastic annually, and sends more and more of it into our oceans, lakes, soils, and bodies.

Read More Show Less
EcoWatch Daily Newsletter
Rise and Resist activist group marched together to demand climate and racial justice. Steve Sanchez / Pacific Press / LightRocket / Getty Images

By Alexandria Villaseñor

This story is part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

My journey to becoming an activist began in late 2018. During a trip to California to visit family, the Camp Fire broke out. At the time, it was the most devastating and destructive wildfire in California history. Thousands of acres and structures burned, and many lives were lost. Since then, California's wildfires have accelerated: This past year, we saw the first-ever "gigafire," and by the end of 2020, more than four million acres had burned.

Read More Show Less
Trending
U.S. Interior Secretary Deb Haaland announced a pair of climate-related secretarial orders on Friday, April 16. U.S. Department of the Interior

By Jessica Corbett

As the Biden administration reviews the U.S. government's federal fossil fuels program and faces pressure to block any new dirty energy development, Interior Secretary Deb Haaland won praise from environmentalists on Friday for issuing a pair of climate-related secretarial orders.

Read More Show Less
David Attenborough narrates "The Year Earth Changed," premiering globally April 16 on Apple TV+. Apple

Next week marks the second Earth Day of the coronavirus pandemic. While a year of lockdowns and travel restrictions has limited our ability to explore the natural world and gather with others for its defense, it is still possible to experience the wonder and inspiration from the safety of your home.

Read More Show Less

By Michael Svoboda

For April's bookshelf we take a cue from Earth Day and step back to look at the bigger picture. It wasn't climate change that motivated people to attend the teach-ins and protests that marked that first observance in 1970; it was pollution, the destruction of wild lands and habitats, and the consequent deaths of species.

Read More Show Less